The filter that Silicon Valley built is now the filter they want to tear down

For months, there has been talk that Silicon Valley’s billionaire class was recruiting a candidate to challenge Rep. Ro Khanna. Early Tuesday morning, that candidate made the announcement official.

Ethan Agarwal (pictured above), a 40-year-old tech entrepreneur with no political background, told TechCrunch on Monday evening that he is running for California’s 17th Congressional District. This process is likely to constitute what could become one of the most lavishly funded primary challenges of the 2026 cycle.

The race highlights Khanna, a 49-year-old Democrat widely viewed as a potential 2028 presidential candidate, who has publicly supported California’s one-time wealth tax. His endorsement angered some of the state’s wealthiest founders and investors, but Khanna redoubled his efforts, introducing national legislation with Sen. Bernie Sanders that would impose a 5% annual wealth tax on all Americans worth $1 billion or more — a proposal their offices estimate would raise $4.4 trillion over a decade.

There is a certain irony in this situation. Agarwal is a Wharton graduate who spent three years at McKinsey before founding fitness company Aaptiv, which he sold in 2021. He recently co-founded financial services startup Coterie, with backing from Andreessen Horowitz.

When Khanna first ran for this seat in 2014, he was a tech-fueled outsider, with tech names like Marc Andreessen, Sheryl Sandberg, and Eric Schmidt endorsing him. He challenged popular Democratic incumbent Mike Honda, losing that bid, but came back in 2016 to win.

Critics at the time described Khanna as a possessive man. A decade later, the same accusation is sure to be leveled against the person trying to overthrow him.

The following is an edited transcript of our conversation with Agarwal.

TechCrunch: Last summer, you announced your plans to run for governor of California. Now you’re joining the congressional race instead. Why switch?

Agarwal: She decided to run for governor in July when the field was very thin. I don’t have a political background – I come from technology. But then a few strong candidates came in, including Matt Mahan, who I think is really strong. I’ve been tracking Roe since his first congressional race in 2012, and have been a staunch supporter of his. But in the past two years, he has been gradually leaning left, and when he tweeted in favor of a wealth tax at the end of December, it was the straw that broke the camel’s back. I realized I could make a bigger impact in the 17th District and unseat Roe.

TC: Who supports you financially?

Agarwal: We’re drawing the papers tomorrow, so we don’t have a bank account yet, and I can’t raise the money until then. He said that — [Y Combinator CEO] Gary tan behind me, [DoorDash co-founder] Stanley Tang, and many others from the tech community whose names will be coming up in the coming days and weeks.

[Editor’s note: The involvement of Tan, Tang, and others will likely fuel a familiar line of attack: that Agarwal is less an independent candidate than a vehicle for billionaire grievances. It is worth noting that Khanna faced nearly identical criticism when he first ran, and was backed by much of the same tech-donor class that is now organizing against him.]

TC: Can you give me more colors in your plan? Aside from closing the loopholes, is there an alternative to the billionaires tax?

Agarwal: The first is the taxation of loans made against assets. Very wealthy people will take out a loan against their property and pay low interest. Because it’s technically a loan, they don’t pay taxes on it. I think it’s very reasonable to tax those loans.

Second, capital gains – California’s interest rate is currently 13.4% and I think it’s reasonable to consider increasing that. Third, many homes in California are owned by private equity firms or people who own them as investments. I think you would have to pay much higher property taxes on a home that is kept as an investment than on a primary residence. This would increase revenues and relieve pressure on families already living on what they own.

[The loan-tax idea has been circulating in wealthy circles for some time — notably espoused by VC Chamath Palihapitiya, though it may trace back further to hedge fund giant Bill Ackman. The proposal would treat loans backed by stock holdings as taxable events, eliminating a longstanding strategy by which investors access their portfolio’s value without selling, and thus without ever paying capital gains taxes.]

TC: If you get to Washington, what are your top three priorities?

Agarwal: Number one, ban stock trading for members of Congress and their families. Number two, ban corporate political action committee money. Number three, term limits.

[Earlier in the conversation, Agarwal spoke at length about the 5,000 children in the 17th district — the wealthiest congressional district in the country — living below the poverty line, and described making it “the first congressional district in history to completely eradicate childhood poverty” as one of his proposals. That point did not make the top three.]

TC: You’ve accused Ro Khanna of being a prolific stock trader. Can you explain?

Agarwal: He traded more stocks than any Democratic member of Congress in the country’s history — in tobacco, oil and gas, Big Pharma and Big Tech. He publicly announced a stock trading ban in Congress, then made 4,000 trades last year. Even if the bill is not passed, nothing prevents him from imposing it on himself. In my case, I will be withdrawing my entire portfolio the first day I am elected, so no one should wonder whether my votes reflect my personal calculations or actual beliefs.

[Both claims deserve scrutiny. Khanna has co-sponsored the TRUST in Congress Act and introduced reform resolutions calling for a ban, but hasn’t authored standalone legislation. On the trading figures, Khanna has repeatedly said that he does not personally own or trade any individual stocks, and that the trades in question belong to his wife, whose pre-marital assets are held in an independently managed trust — which, he noted, eliminates any conflict under Office of Government Ethics rules. Whether that distinction satisfies voters is a question the campaign will have to answer.]

TC: Should social media platforms be held accountable for harming teens? Section 230 of the Communications Decency Act currently protects them from liability for what users post. Where are you in changing that?

Agarwal: I think Section 230, when it was first drafted [in 1996]It made a lot of sense. The goal was for the platforms to essentially act as hosting. But as they have evolved, they now determine what we see because of the algorithms they use. I don’t think it makes sense to hold social media companies fully responsible for what people post – the volume is too high, and having a third party making subjective decisions about what’s harmful is getting into really dangerous territory.

However, I think it’s worth reconsidering when it comes to the long-term effects on teens’ mental health. If you talk to Meta or X or anyone, they’ll all say they don’t profit from hurting teens. We all agree we don’t want that as a result.

TC: What about regulating AI companies, many of which are right in your backyard?

Agarwal: I think about it from a national security perspective. I’m confident that having the strongest models is critical for America, and if we don’t build them, China will defeat us.

Some of the limitations are logical — AI shouldn’t help you hurt yourself or anyone else. But I don’t think we should limit companies’ ability to build and enhance these models. It is vital that we allow them to flourish, for national security purposes, if nothing else.

TC: Do you think we need something like the FDA for AI?

Agarwal: I’ve heard this idea. The FDA has done a pretty good job of keeping Americans healthy and safe — and I trust the people who work there, which I can’t say for most government organizations. If there is a way to build an independent, apolitical authority with alternating terms, that makes sense to me. But I want to make sure they are designed to enhance American national security, not for political purposes.

TC: What about prediction markets – Polymarket, Kalshi? Do they need more organization?

Agarwal: To be clear, both Kalshi and Polymarket are regulated by the Commodity Futures Trading Commission (CFTC). I think part of the problem is that sports betting apps have created a lot of regulatory confusion about what is allowed and in which states Polymarket and Kalshi have emerged as alternatives. But the organization they have today is actually very good.

TC: How do you plan to run this campaign? Are you doing this full time?

Agarwal: This is 110% of my life. I went to [the private San Jose, Ca., school] Harker, which is located in the area. I grew up nearby. I know hundreds, maybe thousands of people who live there. My campaign is mainly a field game, as I go to Chinese and Indian educational schools to attend cultural events. Holi is coming. Chinese New Year, Purim, falls on Tuesday. I’ll be at all of it, meeting people, going to small businesses.

I think that’s actually the fundamental contradiction between me and Rowe: He’s building a national profile, and I’m totally fine with that if that’s what he wants to do. But he does so while abandoning the people of his district. I’m not leaving California. I’m not using this as a starting point. He is a patriot; I am local. And I think people in the 1600s knew they needed someone to focus on them alone.

TC: What was the motivation for getting into politics in the first place?

Agarwal: Maybe it’s a cliché, but – my father came here with absolutely nothing, and he was making $14,000 a year when he first arrived. He started a company, took it public, then sold it. I was born at third base as a result. I started two companies and sold them both.

Then I see people around me no longer benefiting from the same system that made it all possible. The people here work hard, have high potential – but the environment no longer supports them. I’ve been complaining about it for a long time, and I felt like it was time to stand up and do something.

TC: Is this the beginning of a political career?

Agarwal: This is not a career focus. I see a very specific problem in the 17th District that I want to solve. I’ll impose time limits on myself – I won’t do more than five terms – and then maybe I’ll go back to the private sector. Service should be a calling, not a job. And frankly, I don’t think it serves your constituents well when it becomes a career. Even if the term limits bill doesn’t pass, I will impose it on myself. This is what I truly believe.

[That also echoes something from Khanna’s early campaigns — the outsider who arrives with no interest in becoming a career politician except a mandate from the tech industry to shake things up. Whether Agarwal gets further than Khanna’s first attempt did in 2014 may depend on whether Khanna develops any vulnerabilities of his own. Right now, introducing sweeping national legislation with Bernie Sanders and sitting on $15 million in campaign cash, he appears to be doing everything he can to ensure he doesn’t.]